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Published on 1/16/2009 in the Prospect News Municipals Daily.

Connecticut to sell $420 million in refunding bonds; New York City Water to bring $300 million

By Sheri Kasprzak

New York, Jan. 16 - The shortened week ahead was already quickly filling up with new issue offerings Friday, led by a $420 million sale of special tax obligation refunding bonds from the State of Connecticut.

The New York City Municipal Water Finance Authority also has a big deal coming up: a $300 million offering of water and sewer system second general resolution revenue bonds.

Even so, some market insiders reached Friday were not convinced the week would match this past week's volume.

"I think the window's closing now," said one sellsider reached Friday afternoon.

"Last week, in the middle of last week to be more precise, was the time to price. I think some things will get done this week. I don't think it's going to be dead out there, but I would expect that maybe some deals will get put off until there's another window. The timing seems to come and go pretty quickly these days."

Another market source agreed.

"We're not seeing as much coming up next week," he said.

"This week, we were inundated with deals and it seems to be slowing down a bit."

Even so, Connecticut is still planning to bring $420 million in series 2009-1 second-lien special tax obligation refunding bonds on Wednesday.

The bonds will be sold through lead managers Goldman, Sachs & Co. and Banc of America Securities LLC and are due 2010 to 2022.

Proceeds go toward transportation infrastructure costs.

NYC's water bonds

In another large deal coming up this week, the New York City Municipal Water Finance Authority is expected to sell $300 million in series 2009EE water and sewer system second general resolution revenue bonds Thursday, according to a calendar of upcoming sales.

The bonds (Aa3/AA+/AA+) will be sold through senior manager Siebert Brandford Shank & Co. Proceeds will be used for construction projects.

Also on Thursday, the Tarrant County Cultural Education Facilities Finance Corp. in Texas plans to price $215.18 million in series 2009 health revenue refunding bonds for Baylor Health System.

The bonds (Aa2/AA-/) will be sold through lead managers Merrill Lynch & Co. and Goldman Sachs.

The bonds are due 2009 to 2019 with term bonds due 2024 and 2029.

Proceeds will refund Baylor Health System's series 2001B and 2001C revenue bonds and repay a loan advance from Banc of America and JPMorgan Chase Bank.

San Antonio's bonds

Another Texas offering is planned for Wednesday - this one from the City of San Antonio. The city is slated to price $175 million in series 2009 water system revenue and refunding bonds, according to a sales calendar.

The bonds (Aa2/AA/AA), which are due 2009 to 2039, will be offered through senior managers Citigroup Global Markets Inc. and J.P. Morgan Securities Inc.

Proceeds will be used to construct, equip, expand and improve the city's water system as well as refund outstanding commercial paper notes.

San Francisco USD G.O.s

Looking to Thursday, the San Francisco Unified School District of California is expected to price $150 million in series 2009B general obligation bonds (Aa3/AA-/), according to a sales calendar.

The bonds, due 2009 to 2024, will be sold through senior manager Banc of America Securities.

Proceeds will be used to design and construct projects throughout the district.

Rush U Medical Center bonds to price

On Wednesday, the Illinois Finance Authority plans to sell $112.9 million in series 2009 revenue bonds for Rush University Medical Center, said a preliminary official statement.

The bonds (A3/A-/A-) will be sold on a negotiated basis with Morgan Stanley & Co. Inc. and J.P. Morgan Securities as the senior managers.

The sale includes $77.38 million in series 2009A bonds and $35.52 million in series 2009B bonds.

The bonds were originally offered in December but were postponed due to market conditions. The bonds are now expected to price in January.

Proceeds will be used to finance or refinance the campus redevelopment at the Rush University Medical Center.

Westchester bonds on Thursday

Westchester County in New York is scheduled to bring $135.16 million in series 2009 G.O. bonds to market Thursday, according to a preliminary official statement released Friday.

The bonds (Aaa/AAA/AAA) will be sold on a negotiated basis.

The sale includes $108.405 million in series 2009A G.O. bonds, $8.925 million in series 2009B G.O. bonds and $17.83 million in series 2009C G.O. refunding bonds.

Citigroup Global Markets is the senior manager for the 2009A and 2009B bonds and is a co-manager for the 2009C bonds. Sterne, Agee & Leach Inc. is lead manager for the 2009C bonds and is a co-manager for the 2009A and 2009B bonds.

The 2009A bonds are due 2011 to 2024, the 2009B bonds are due 2011 to 2029 and the 2009C bonds are due 2009 to 2019.

Proceeds will be used for various capital improvements, the construction of water and sewer facilities and the refunding of the county's series 2003 bonds.

El Dorado Irrigation deal

Out west, the El Dorado Irrigation District of California plans to price $133 million in series 2009 revenue certificates of participation (A2/A+/) Wednesday, said a preliminary official statement released Friday.

The COPs will be sold with Citigroup Global Markets as the lead manager.

The COPs are due 2013 to 2024 with term bonds due 2029, 2035 and 2039.

Proceeds will be used to acquire facilities for the water and sewer district as well as to refinance existing COPs.

Secondary levels off

Much like the primary market, where insiders expect pricing action to taper off, the secondary market leveled off on Friday after a week of mostly gains.

"It was a bit quieter and really kind of mixed at the end," said one trader reached in the early afternoon Friday.

"I'd say mainly unchanged to a little off, but not by much. Maybe a basis point or two here and there."


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